02/10/2015

A trifling debt makes a man your debtor; a large one makes him an enemy.

-Seneca the Younger

Yesterday, the, dare I say, always-worth-reading Paul Krugman wrote on the on the hazards of deliberating in “Nobody Understands Debt”: “Why is deleveraging a problem? Because my spending is your income, and your spending is my income, so if everyone slashes spending at the same time, incomes go down around the world.” Mr. Krugman provides the orthodox Keynesian diagnosis of deleveraging in terms of aggregate demand and it doing so reveals the flaws of the aggregate-demand approach: It ignores the ecological qualities of the markets.

To really understand whether people’s spending reflects the wealth of the nation, we have to understand the context in which people are trucking, bartering and exchanging. The economy is a coordination problem where profits are to be had by bringing people’s future plans into greater coordination with each other. Wealth, in turn, is fit order that correctly anticipates people’s future appetites and is thereby coordinated with them.

Any process of deleveraging therefore needs to be understood in a coordination perspective. Such a process, however painful, can be necessary if there is widespread mal-coordination within the economy. In a 2010 study, “Debt and Deleveraging: The global credit bubble and its economic consequences,” the authors, Roxburg et al., addressed such mistaken activity when it wrote about how the level of debt in most mature countries aggressively expanded after 2000 due to “unusually low interest rates and risk spreads…” (Roxburgh et al. 2010: 10). Later in the study, Roxburgh et al. specifically point to the leverage of households as being an economic problem post-2008:

Taking a more granular view of leverage within sectors of the economy, we find that households increased their borrowing substantially, particularly through home mortgages. Rising housing prices meant that the ratio of household debt to assets appeared stable in the years prior to the crisis. But household debt compared with disposable income increased significantly, which should have raised a red flag long before the crisis. (Ibid)

Leverage just isn’t a data point; rather, it’s the manifestation of economic life. Whether it’s a manifestation that adequately corresponds with the demands of life is another matter. The markets can and do lead to situations where the patterns of specialization and trade that have hitherto evolved are, for one reason for another, unsuited to the demands of life. Roxburgh et al. write of a credit bubble that led to households holding an unsustainable level of debt, compared to their income, once economic reality reasserted itself.

Mr. Krugman is correct in asserting that debt per se is nothing, “it does not directly make the economy poorer (and paying it off doesn’t make us richer)” What makes us poorer or richer is how our economic life, the patterns of specialization and The moment that people realize the departure of the two is, like most sudden revelations, a moment of crisis—the crash of the housing market was certainly devastating for those who had based their economic life on it.

Once such bubbles have burst, spending needs to go down so that people can figure out the most profitable ways of doing business with one another. Deleveraging can be a necessary part of that natural process. The way forward isn’t to deny that people borrowed too much, it’s to accept that people have to adapt themselves to the demands of economic life and deleveraging, as described by Roxburgh et al., can be a necessary part of that process. Economic life, after all, is a coordination problem. Even if that coordination problem may be somewhat of a mass hallucination, it is still a mass hallucination that people have to adapt to if they desire to flourishing.

Insofar as deleveraging reflects the aftermath of the extinction of unprofitable patterns of specialization and trade, it reflects an event that enhances the wealth of the nation by bringing people’s economic decisions into better coordination with one another. It is bad when it doesn’t it doesn’t enhance that coordination, which can be the case when there are monetary disturbances—but that’s a topic for another day. The connections created between people through business are complex and ecological, not simple and hydraulic.

Mr. Krugman’s repetition of the tired line that “We owe debt to ourselves” encapsulates the latter perspective. People don’t owe money to themselves; rather, different people in their own distinct stations of life owe money to different people. There’s a politically pertinent reason for not wanting to look at loans in such simplistic terms: The adage that he who holds the purse holds the power is all too true.

The fall of Prime Minister Silvio Berlusconi’s government in Italy following pressure from the bond markets on his government’s finances in 2011 and the rise of Mario Monti’s government of unelected technocrats, just a week after Monti had been appointed a senator for life by President Giorgio Napolitano, should be a lesson in the power of the bond markets as a faction. A modern government cannot operate without access to well-functioning bond markets, which means that bond-holders are a potential faction that can override an otherwise democratic government’s wishes. As long as people have different appetites and different ways of life, then the slogan “We owe it to ourselves” is a delusion. There is no ‘us.’ There’s only a heterogenous population of different people all with their own ends in life, and only a fool bets that people will be publicly spirited when crisis is around the corner.

02/05/2015

In his first set of lecture notes on what I gather is a series of lectures about the Great Recession, Paul Krugman cites John Maynard Keynes’ “The Great Slump” as follows:

This is a nightmare, which will pass away with the morning. For the resources of nature and men's devices are just as fertile and productive as they were. The rate of our progress towards solving the material problems of life is not less rapid. We are as capable as before of affording for everyone a high standard of life—high, I mean, compared with, say, twenty years ago— and will soon learn to afford a standard higher still. We were not previously deceived. But today we have involved ourselves in a colossal muddle, having blundered in the control of a delicate machine, the working of which we do not understand. The result is that our possibilities of wealth may run to waste for a time—perhaps for a long time.

The technocratic point of view is that wealth is simply an artifice, it’s simply a matter of solving the problem in front of us. To paraphrase someone I read on Facebook the other day, inventing the iPhone is a matter of taking research and adding water. From the technocratic point of view, the slump is our fault and every day that it goes on, it is a failure of human ratiocination. If we had not blundered in our control of the delicate machine that is the economy, the slump could have been avoided. In sum, slumps are our fault, which is why Paul Krugman wrote a book two years ago titled, End This Depression Now!.

I agree with Mr. Krugman that “what is going on in a depressed economy? How is it that “our possibilities of wealth may run to waste for a Time?” is a key issue for understanding the wealth of nations in the context of slumps. Yet, I think that he errs in asserting that the question “what leads to the crises that precede a depressed economy?” distracts us from considering the first question. The answer to neither is obvious. The reason we cannot end slumps with the ease of pushing a button is that we lack the dispersed bits of knowledge about the causes of the slump and the long-run results it heads towards.

After all, the slump isn’t an event all its own; rather, it’s a continuation of events that had happened before and are, themselves, heading towards their long-run consequences. To therefore understand the first question Mr. Krugman offers, we have understand the second question. There is no such thing as ‘depression’ or ‘slump’ economics, only economic processes continuing themselves.

The wealth of nations is a manifestation of a lengthy history of market selection. Entrepreneurs do create order, but whether that order is wealth, that is whether it serves the human race’s most urgent appetites, can only be determined by the markets. Although entrepreneurs make bold conjectures about what can add to a nation’s wealth, those conjectures are, nevertheless, fallible. Whether they will prove right, or at least advantageous, is a matter of the market process, and entrepreneurs are exposed to both the possibilities of success and failure, profit or loss. The fragility of an individual entrepreneur’s situation adds to the greater health of the market. The markets are thereby antifragile. They love volatility. Slumps should be understood as being part of that volatility—the rest of this post will largely be me punning the table on that point.

Here, the feedback mechanism between entrepreneur’s conjectures and the market process is critical. As Eric Beinhocker argues in The Origin of Wealth, wealth is fit order The market process is what tests the fitness of the variety of orders created by entrepreneurs. Here, we’ve got the three conditions for evolution: a population of various entities, a means of those entities surviving through time, and the non-random selection of entities better suited to their environment.

Figuring out what actually adds to the wealth of the United States, or France, or Japan, or the world for that matter, takes time. There is a knowledge problem that needs to be conquered in figuring out what is wealth and that problem can only be solved by the joint efforts of producers and consumers all trying to appease their own particular appetites. Those interactions nonlinearly add up to constitute the market process. No one knows what actually adds to the wealth of nations, so therefore everyone has got to wait for the final market test, determined by the market process. Will the iPhone profit? Will house prices continue to go down. Will this or that commodity be the future? Creating wealth simply isn’t a matter of taking scientific knowledge and adding water, it’s a matter of being alert to new possibilities for mutually beneficial exchange.

As Arnold Kling writes in “Wither Macroeconomics?,” we have to take very seriously the idea that slumps are a product of the breaking down of the capitalist system. While such a choice of words may sound downright Marxist, it is an apt description of what happens when the patterns of specialization and trade that once constituted an economy break down. The economic ways of life that people once relied on go underwater without an immediate replacement available. All that is solid seems to dissolve to air and people, having to look for new specializations to fit into the greater economic ecosystem they are embedded in, begin to doubt the future. Going ever more Medieval, we can talk about the forces that corrupted those patterns, say policies that aggressively encouraged homeownership and mortgage lending, and still be talking more sense than attempts to explain all slumps in AS/AD fashion.

The technocratic point of view would lead us to believe that the problem of slumps is a matter of technological knowledge that requires a conscious decision to jump-start the economy, whether by fiscal or monetary stimulus. In “The Great Slump,” Keynes declared that “We have magneto trouble.” Earlier in the same article, he had declared, in the quote above, “to-day we have involved in control of a delicate machine, the working of which we do not understand.” Keynes is right that we do not understand the working of the economy, but he errs in calling it a machine. The economy is an ecosystem of production and exchange, not a machine. Injecting a little bit of stimulus here or there won’t have a linear impact, but will create a cascade of changes we can scarcely know. In the long run, we may be dead, bit the effects of our policies will live on in unpredictable fashions.

Generally, slumps are a symptom of a greater knowledge problem and thereby need to be understood as millions of people all trying to jointly solve it. Slumps are an occasion for celebrating entrepreneurs, not policy makers. Getting out of the lump not about a jump starting an engine as it is discovering new opportunities for mutually beneficial trade. The problem is, therefore, less a matter of a stuttering engine as it is a matter of evolutionary search. The decisions to be made by millions of entrepreneurs, not hundreds of technocrats.

Slumps are a part of the evolution of wealth. Anyone who denies that is selling snake oil. The technocrats who promise otherwise are of the most dangerous animals in the political menagerie.

01/28/2014

Ages are no more infallible than individuals; every age having held many opinions which subsequent ages have deemed not only false but absurd; and it is as certain that many opinions, now general, will be rejected by future ages, as it is that many, once general, are rejected by the present.

-John Stuart Mill, On Liberty

By liberty I mean the assurance that every man shall be protected in doing what he believes his duty against the influence of authority and majorities, custom and opinion.

-Lord Acton, The History of Freedom in Antiquity

The ‘open society’ is a term much used, but tragically little understood. Like too many terms within political philosophy, it is simply used in an emotivistic fashion to signify the author’s approval of something. Originating with Henri Bergson’s writing in the 1930s, the term was make famous by Karl Popper’s two volume project, The Open Society and Its Enemies. The books were a sustained attack on both the political ideas of Plato as well as the historicism of Hegel and Marx, and a powerful argument for the advantages of liberal democracy. The ‘open society’ has thereafter become a banner for liberals and social democrats, but its widespread use has not been beneficial for its clear meaning as a term in conversation. Which leads to the question: What exactly is the ‘open society’?

Even though Popper ( a founding member of the Mont Pelerin Society) certainly had a favorable opinion of liberal democracy, we must remember that Karl Popper’s concept of an ‘open society’ was epistemological, not political. It is very easy to simply identify the open society with a certain political regime in which democracy flourishes, and people have certain guaranteed rights, but Popper’s point did not have anything directly to do with either of those two points. The open society is a society in which people can make their own opinions about norms and policies, and can act upon those opinions. When Popper quoted Pericles as being a proponent of the open society when he quotes him as saying: “Although only a few may originate a policy, we are all able to judge it”, Popper was noting that Pericles’ notion of Athenian democracy enabled the Athenian to make his own decisions about political decision making, and that was the essential condition making Athens an open society.

What differentiated an open society from a closed society is thereby that, within the open society, individuals would be able to make decisions to change cultural norms. Closed societies, on the other hand, are found in a lack of a distinction between the conventional laws of human society, and the physical laws of the universe. They are constituted by taboos, norms thought to be permanent features of the world just like gravity or the movement of the stars and moon above. Thought to be the creation of gods, of forces of history, or of demigod-like leaders, and the rigidity of these taboos ensures that the society is closed to change. Popper even argued that the existence of taboos within closed societies resulted in people within those societies not being faced with decisions that could be called moral:

There are few problems in this form of life, and nothing equivalent to moral problems. I do not mean to say that a member of a tribe does not sometimes need much heroism and endurance in order to act in accordance with the taboos. What I mean is that he will rarely find himself in the position of doubting how he ought to act. The right way is always determined, though difficulties must be overcome in following it. It is determined by taboos, by magical tribal institutions which can never become objects of critical consideration (Popper 1945, 172).

Kierkegaard’s assertion that philosophy begins with doubt is quite germane here. Popper writes on what differentiates the open society from that of taboos:

Political decisions may lead to the alteration of taboos, and even of political laws which are no longer taboos. The great difference is the possibility of rational reflection of these matters… And in our own time, many of us make rational decisions concerning the desirability or otherwise of new legislation, and of other institutional changes; that is to say, decisions based upon an estimate of possible consequences, and upon a conscious preference for some of them. We recognize rational personal responsibility.

In what follows, the magical or tribal or collectivist society will also be called the closed society, and the society in which individuals are confronted with personal decisions, the open society (Ibid, 173).

The open society comes to fruition when people can philosophize, in however a crude fashion, and come to make decisions which can have impact upon the conventions of society. Unlike the closed society, the open society can be changed by the opinions of those within it.

What defines the open society is therefore an answer to a question which Darwin never broached in On the Origin of Species: What types of systems can evolve? It’s important here to note that Charles Darwin never used the word ‘evolution.’ Instead, he used the phrase ‘descent with modification.’ At the beginning of the final chapter of On the Origin of Species, Darwin described his argument as being “the theory of descent with modification; through variation and Natural Selection.” Questions of evolution are best thought of in terms of ‘descent with modification’ because the term constantly reminds us what we should be thinking about when we think about evolution: The mutability of objects across time because of some source of variation.

‘Evolution’ is a term used so often and so widely that it loses its ability to really address what we are thinking about when we talk about what it addresses. From being used to refer to the ”theory of descent with modification; through variation and Natural Selection” (e.g. “We should teach evolution, not creationism in schools”) to the notion that certain types of systems in the world which can adapt to change through time (e.g. “Societies evolve throughout history”), ‘evolution’ does little good to exactly specify what we are trying to talk about when we it. ‘Descent with modification’, on the other hand, focuses our attention on what matters: that there are certain systems which can change through succeeding iterations.

The closed society is a closed system with no source of change which can introduce variation into it. The way that societies change is with alterations to norms and institutions. If those norms and institutions are taboos, assumed as permanent features of the world and thereby insulated from criticism, then that society does not have a effective way of adapting to the changing demands of its populations. Within the closed society, there is therefore an identity between the taboos of the present generation with that of the previous generation. However, when people are left to make their own judgments of the desirability of norms and institutions, then there is a source of variation which can then change the society. With a variation in judgements about the desirability of norms and institutions, society can change over time, and descent with variation - that is, evolution - is therefore possible.

The open society is the a society which enables the accumulation of useful social variation which can encourage the flourishing of those within it. What a ‘useful’ variation is must be kept empty here. To think that the human mind can define what social variation is useful from the point of view of society as a whole is to fall victim of the fatal conceit. There is a knowledge problem in recognizing the useful from the harmful since only those who are familiar with the variation in question will by and large have any chance in properly making that call. Even then, many may still make mistakes. And so there must be feedback mechanisms in place whose soundness can be relied upon with no reference to the specific people involved with them. The project of the open society is thus, in short, about figuring out the legal institutions, the formal rules of the game for society at large, which enable the accumulation of useful social variation.

That Popper harshly criticized the idea of national destiny within The Open Society and Its Enemies fits with all that I have said above. Societies do not follow predetermined courses through history, and the traits that they have at any moment in time cannot be attributed to destiny. Instead, those traits are a consequence of a historically continent series of events, and unique outcomes which resulted in certain variations manifesting themselves within society at large. The open society is simply no guarantee of optimal outcomes. Speaking technically, evolution can get stuck within local maxima within its fitness landscape, and those local maxima can prevent its fitness walk from finding the global maximum; evolution, does not necessarily yield the optimal outcome. Instead, all that the open society can guarantee us is a fighting chance for that optimal outcome.

Those institutions and habits which we identify with the optimal outcome cannot simply be assumed as an outcome of history - along the great forward march of progress - but must be understood as perishable. I thus like to modify the term ‘open society’ with the adjective ‘free’ to identify that society, one protecting the dignity of the individual human person’s free will, as the optimal outcome. Not only is it open, but it is also free; to get there, we must not only insist on having an open society, a society which can accumulate useful variation, but also a society which conforms to classically liberal notions of political ethics.

Bibliography

Popper, Karl. The Open Society and Its Enemies Vol. I. Princeton: Princeton University Press, 1966.

Nassim Nicholas Taleb argues that we need to retire the concept of standard deviation, which is both inferior to mean deviation and has been masquerading as that more sound concept ever since Karl Pearson introduced it in 1893:

The notion of standard deviation has confused hordes of scientists; it is time to retire it from common use and replace it with the more effective one of mean deviation. Standard deviation, STD, should be left to mathematicians, physicists and mathematical statisticians deriving limit theorems. There is no scientific reason to use it in statistical investigations in the age of the computer, as it does more harm than good—particularly with the growing class of people in social science mechanistically applying statistical tools to scientific problems.

Say someone just asked you to measure the "average daily variations" for the temperature of your town (or for the stock price of a company, or the blood pressure of your uncle) over the past five days. The five changes are: (-23, 7, -3, 20, -1). How do you do it?

Do you take every observation: square it, average the total, then take the square root? Or do you remove the sign and calculate the average? For there are serious differences between the two methods. The first produces an average of 15.7, the second 10.8. The first is technically called the root mean square deviation. The second is the mean absolute deviation, MAD. It corresponds to "real life" much better than the first—and to reality. In fact, whenever people make decisions after being supplied with the standard deviation number, they act as if it were the expected mean deviation.

Deirdre McCloskey and Stephen T. Ziliak’s The Cult of Statistical Significance is another compelling criticism of the problem of the mechanistic application of statistics to problems of society. When statistics are going to be used, the practitioner cannot simply apply cookbook formulas if he is going to get the soundest conclusions; instead, he must understand the way in which statistics manipulates data in order to make statements about wider phenomena. The difference between standard and mean deviation is an example of where practitioners need to get a best grasp of the tools they use. The advent of every practitioner being able to have a powerful computer has also alleviated the need for statisticians to rely on simpler means of calculation - one possible reason why the frequentist view of statistics won out against the Bayesian - and has made it possible for practitioners to integrate more demanding calculations within their statistics.

Peter Richerson, a biologist who is emeritus at the University of California, Davis, argues that the concept of human needs to be abandoned this year for an understanding based on variance:

The concept of human nature causes people to look for explanations under the wrong rock. Take the most famous human nature argument: are people by nature good or evil? In recent years, experimentalists have conducted tragedy of the commons games and observed how people solve the tragedy (if they do). A common finding is that roughly a third of participants act as selfless leaders, using whatever tools the experimenters make available to solve the dilemma of cooperation, roughly a tenth are selfish exploiters of any cooperation that arises, and the balance are guarded cooperators with flexible morals. This result comports with everyone's personal experience, some people are routinely honest and generous, a few are downright psychopathic, and many people fall somewhere in between. Human society would be entirely different if this were not so. The human nature debate on the topic was sterile because it did not attend to something we all know if we stop to think about it.

The problem with Richerson’s argument here is that, in course of making an argument against the notion of human nature, he makes claims which strongly resemble claims about human nature. The assertion that a third of people are saints, a tenth of devils in disguise, and the rest somewhere in between looks very much like an answer to the essentialist question of whether people are either good or evil. The assumption that such a question must be answered on a binary scale of either yes or no is simply a caricature of the study of human nature.

At its best, the study of human nature is the study of certain propensities within humanity which are universal across human societies, like the Westermarck effect and a concern for purity. Even though Richerson’s criticisms of a naïve view of human nature which conceives of human nature as “causally prior to nurture both in evolutionary and developmental time,” its insights simply do not apply to more nuanced approach, like that within Edward O. Wilson’s book On Human Nature.

Despite possessing capacities far beyond other animals to consider others' minds, to empathize with others' needs, and to transform empathy into care and generosity, we fail to employ these abilities readily, easily, or equally. We engage in acts of loyalty, moral concern, and cooperation primarily toward our inner circles, but do so at the expense of people outside of those circles. Our altruism is not unbounded; it is parochial. In support of this phenomenon, the hormone oxytocin, long considered to play a key role in forming social bonds, has been shown to facilitate affiliation toward one's ingroup, but can increase defensive aggression toward one's outgroup. Other research suggests that this self-sacrificial intragroup love co-evolved with intergroup war, and that societies who most value loyalty to each other tend to be those most likely to endorse violence toward outgroups.

Even arguably our most important social capacity, theory of mind—the ability to adopt the perspectives of others—can increase competition as much as it increases cooperation, highlighting the emotions and desires of those we like, but also highlighting the selfish and unethical motives of people we dislike. Furthermore, for us to consider the minds of others in the first place requires that we are motivated and possess the necessary cognitive resources. Because motivation and cognition are finite, so too is our capacity to be social. Thus, any intervention that intends to increase consideration of others in terms of empathy, benevolence, and compassion is limited in its ability to do so. At some point, the well of working memory on which our most valuable social abilities rely will run dry.

Again, a problem that I have with Wytz’s argument is that he isn’t very generous to what people are talking about when they speak of humans as social animals. He says that the concept “has lent credibility to numerous significant ideas: that humans need other humans to survive, that humans tend to be perpetually ready for social interaction, and that studying specifically the social features of human functioning is profoundly important.” It seems that Wytz equivocates the claim that human beings have a propensity towards forming social relationships with the claim that human beings are altruistic, ever extroverted saints. Anybody who has read Darwin’s Descent of Man knows that that is not true, and that social propensities are often parochial propensities. Nevertheless, they are still there, and human beings have the biological capability to be social in a way otherwise unseen in the animal kingdom.

06/03/2013

“Do not think that I have
come to bring peace on earth; I have not come to bring peace, but a
sword. For I have come to set a man against his father, and a
daughter against her mother, and a daughter-in-law against her
mother-in-law; and a man's foes will be those of his own household.
He who loves father or mother more than me is not worthy of me; and
he who loves son or daughter more than me is not worthy of me; and he
who does not take his cross and follow me is not worthy of me.”

-Matthew
10:34-38 (Revised Standard Edition)

Doxastic
(from the Greek word δόξα
-“Doxa” - meaning “belief”) commitment, a steadfast
allegiance in action to the beliefs one holds, is an intrinsic
precondition of honor. After all, one of the fundamental demands of
honor is the condition of skin in the game, that the person in
question be exposed to the costs of her actions. When an honorable
human beings acts, she does so in a fashion that exposes her to not
only the benefits, but also all of the costs, no matter how bitter,
of that action.

The
honorable person is thus fully exposed to all of the harmful
consequences that result from her behavior. Just as she has her skin
in the game when it comes to her ventures in the world exposing her
to the harmful effects of those ventures going belly up, she has her
soul in the game when it comes to her moral beliefs exposing her to
being hurt by them. Nevertheless, doxastic commitment demands that we
put our full soul into the game, and be willing to take whatever hurt
that follows.

No
one likes being hurt, and no one especially likes consciously opening
himself to harm in the future. Soul in the game exposes the very
fiber of our ethical being and identities to wounds, uncertain in
their severity, so it should be no surprise that so many want to
avoid identifying themselves with clear-cut moral propositions that
doxastic commitment requires. As Cicero noted in On Duties:
“From the beginning nature has assigned to every type of creature
the tendency to preserve itself, its life and body, and to reject
anything that seems likely to harm them...” Our animal nature thus
expresses itself when we hedge on our believes and remove our whole
soul from the game in order to avoid pain.

However,
if doxastic commitment leads to a great chance of being hurt in the
future, then would it not be rational to protect oneself against that
pain by hedging one's beliefs? We need not abandon all of our moral
commitment to do this; rather, we only need to be a bit wishy-washy
on key matters that would bring up conflict. Our soul need not
completely out of the game, but it could just play the game less
intensely. However, this ignores the twofold importance of doxastic
commitment. Not only is it a laudable trait for a human being to
have, but doxastic commitment is conducive to the selection of the
best moral practices across societies.

For
one thing, fear of pain is never a virtuous motivation. It may
illicit sympathy from an onlooker, but the impartial spectator would
never applaud it. There is simply no honor in it. That being willing
to accept great costs for one's beliefs is so important to honor is
displayed in dueling traditions in history. Those customs demanded
that a duelist be willing to sustain great bodily harm, and even
death, to display their doxastic commitment and therefore their
honor.

Another
aspect of doxastic commitment is that it is much easier to keep
people accountable for their beliefs in a community that adheres to
that custom. Doxastic commitment thus allows for the efficient
communication of desired moral conduct because a person with her full
soul in the game is open to social cues that alert her to the
desirability of her conduct. Why this is so can be understood in
light of systems theory. In a complicated system in which paths of
concatenation twist and turn this way and that, simple signals that
illicit certain responses from the constituent parts of the system
are a means of ensuring that the constituent parts of that system are
operating as they need to ensure the health of that system. Thirst
and hunger are two mundane examples by which an animal body, itself a
system of many constituent parts, ensures that it is kept well fed
and satiated. An animal need not take measurements of either
hydration or nourishment to maintain its health; instead signals
within the system provide controls that keep it acting towards the
overall wellbeing of the whole system.

A
moral community is also a complex, adaptive system since there is a
constantly changing frequency of moral habits within it, and those
frequencies can change based on the signals of approbation and
censure they interact with. In order for the best patterns of conduct
to multiply within the community, people need to learn what those
best patterns of conduct are, and be put into a situation in which
they are likely to actually go through with adopting them. Both are
critically necessary. In order to discover them, people need to have
their moral character open to critique. So much in human knowledge
proceeds via the process of conjecture and refutation. This is
especially true when all of the knowledge necessary to come to the
final judgment is rarely at the disposal of any one person, which is
certainly true in practical ethics. We may never have the knowledge
to determine the judgment of the impartial spectator, but he social
process of conjecture and refutation, of approbation and censure, can
help us come close.

However, moral learning by approbation and censure can only function
when there's soul in the game. When people do not put their whole
soul in the game, they weaken the signals that they receive about the
desirability and propriety of how they live their lives. When people
choose to associate themselves with moral propositions that are so
indefinite that they can be twisted to suit almost any situation
imaginable, then they are unaccountable. Any attempt to criticize
them is like trying to grip water: It will always frustratingly slip
between one's fingers, ever in metamorphosis to accommodate the
circumstances.

Worse, people are more likely to put their whole soul in the game
when they are likely to receive praise than when they are to receive
condemnation. So now not only is not holding to the habit of having
soul in the game not only because it delays the process of the
discovery of the best morals by conjecture and refutation, but it
also corrupts that process because people will act so as to get a
positive signal without truly having the trait that would bring that
positive signal about. Not only do they not have their whole soul in
the game, but the soul they put there is not their own.

As a
result, doxastic commitment lends itself not only to personal virtue,
but also the efficient operation of an ethical society in which
everyone gets not only the benefits, but also the costs, of their
moral beliefs, which in turn helps to weed out the least proper and
least cleaved-to moral beliefs.

Doxastic
commitment is thus not only a sine qua non for a human being's
virtue, but also a rule that helps the efficient discovery of the
best moral beliefs. Without soul-in-the-game, not only is an
individual really incapable of standing for anything because he is
incapable of being wrong on anything, but an individual is not
accountable for what they have said before because they have not
committed to it. A human being without soul-in-the-game is either
too afraid of the pain that being open to the costs of one's beliefs
or simply does not have any. The impartial spectator would certainly
applaud neither.